Why are Accounts Receivable Aging Reports so Important?

Posted by Gil Oliva on Fri, Apr 04, 2014 @ 07:53 AM

In order to structure a workable operating budget for your company, it is necessary to periodically generate an accounts receivable report showing the aging process for outstanding invoices for any goods and services supplied.

accounts receivable aging reportThis critical report allows you to carefully analyze the financial reliability of your customers. If one company is consistently late paying invoices, it should send out a warning flag that there is a possibility they are not succeeding in meeting their business goals. This could make them a potentially bad credit risk and therefore a bad account to work with.

To successfully meet monthly operating costs you need a steady revenue stream, and an accounts receivable aging report will show which companies are making regular, on-time payments. Without this information, it will be difficult to maintain a healthy cash flow if you are always worried about late payment on outstanding invoices.

Once you are able to assess which accounts constantly pay late, you can evaluate payment terms with your suppliers and make changes accordingly. For example if a customer consistently pays 5 days later than the payment terms agreed upon, and you have historically accepted the late payment, but your suppliers need payment earlier, you will eventually have problems making payments to your suppliers and jeopardize that relationship. This, in turn, could result in loss of customers, as suppliers lose faith in your company’s ability to pay bills in a timely fashion.

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Topics: Cash Flow Solution, Factoring Accounts Receivable, Financing Government Contractors

How Streamlined is your Working Capital Management?

Posted by Gil Oliva on Wed, Apr 02, 2014 @ 08:00 AM

Are you taking maximum advantage of your working capital? In the process of achieving maximum profit, some operational savings can be neglected. So what should you consider in order to make your money work most effectively for your company?

Take a look at the complete chain, from the most efficient design of your product to the optimum manufacturing process. Then analyze the sales and sales support process. Are all your processes streamlined and simple, and do they eliminate waste?

In a recent document for QFinance, Patrick Buchmann, Managing Director at Thyssen Krupp, and Udo Jung, Sr. Partner at Boston Consulting Group, examine techniques for optimizing inventories, receivables, and payables. They reference how to manage the operational components of net working capital. The best practice document gives an in depth explanation and also covers the following areas:

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Topics: About Invoice Factoring, Accounts Receivable Collection

Have you Noticed A Continuing Slow Payment Trend?

Posted by Seth Herman on Fri, Mar 28, 2014 @ 07:55 AM

Building upon recent posts concerning cash flow, it seems that many companies are still taking longer than ever to pay their invoices. This is a dilemma for small businesses waiting on invoice payment to effectively cover operating costs.

Even though the economy is slowly recovering, many large corporations are still pushing smaller suppliers into long payment cycles of up to 90 days, threatening to back out of deals or find new sources if their demand for a 90 day payment cycle is not accepted. This can simply not be viable for some small businesses that do not have the sway to delay payment to their suppliers.

 Before we launch into the benefits of factoring your accounts receivables, let’s revisit a few ideas that may help the payment process along.

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Topics: About Invoice Factoring, Purchase Order Financing, Financing Government Contractors

Factoring your Cash Flow

Posted by Gil Oliva on Wed, Mar 26, 2014 @ 08:06 AM

Eliminating a Cash Flow Crisis – How Invoice Factoring can Help

Invoice factoring is a highly effective tool when it comes to helping with cash flow management. However it is essential that the cash flow cycle for your company, and your industry, is evaluated and understood.

We all know that monitoring cash flow is critical for success. Once cash flow is managed, decisions can be made about whether or not invoice factoring is the most effective answer to help your business achieve optimum cash flow goals.

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Topics: About Invoice Factoring, Financing Government Contractors

Working Capital Management the Invoice Factoring Way

Posted by Gil Oliva on Fri, Mar 21, 2014 @ 08:39 AM

It is helpful to revisit the fundamentals of invoice factoring periodically. We frequently refer to the invoice factoring procedure in many blogs, but often when concentrating on the benefits of accounts receivable financing as it relates to a specific topic. We have recently discussed the documentation and process involved, but let’s illustrate a little further.

When you decide to factor your company’s accounts receivables, you are essentially selling them to a factor at a discount in exchange for a cash advance. The factor must wait normally 30 but up to 90 days to collect the full value of the invoice from your customers.The discounted invoice amount is the factor’s fee for advancing cash on unpaid invoices. This amount may also be referred to as a rate.

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Topics: Cash Flow Solution, About Invoice Factoring, Factoring Accounts Receivable

How a Flexible Supply Chain Can be an Impactful Differentiator

Posted by Gil Oliva on Wed, Mar 19, 2014 @ 08:01 AM

Are you able to respond quickly to a change in demand? How about a major disruption to the distribution or manufacturing process?

On an operational level, how quickly can your company react to problems or opportunities in the short term, such as a late delivery, a customer needing extra items on a large order, or items that were due to be delivered by ground now need to get there overnight. On a larger scale, your company wants to start selling on the web, or a product is changing design or certain components, and therefore disrupting the production process. What would it take to change the direction of your supply chain?

A successful business is able to quickly respond to sudden alterations in demand. The need to be able to adapt to sudden change is vital in today’s rapidly advancing world. This has become harder in an economy that demands efficiency. The recession witnessed a drop in demand, which saw many companies trimming inventory and cutting costs in supply chain operations. However, a company with a weakened supply chain struggles to keep pace with economic recovery.

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Topics: Cash Flow Solution, How to Grow Your Business, The Benefits of Invoice Factoring, About Invoice Factoring

Low Rates, Fast Cash, and Excellent Customer Service - The Invoice Factoring Trifecta

Posted by Steve Barthol on Fri, Mar 14, 2014 @ 07:48 AM

Are you paying too much for invoice factoring?

How would you know? Read on to make sure you are accessing your working capital for the lowest rates, while also receiving fast turnaround and great customer service.

There is often a collective sigh of relief when your company makes the decision to factor accounts receivables. The forms have been submitted and accepted, and the factoring process seems to be going as planned. Working capital is rolling in ahead of time, allowing you to keep up with payments on your day-day operations. However, the ability to feel in control of bill payment can often override the fact that you may well be paying too much for factoring, receiving slow service, and a mediocre customer experience.

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Topics: About Invoice Factoring, Financing Government Contractors

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